Denmark proposes phasing out building damage insurance scheme

Jacob Mark, the Danish Minister for Children, Seniors, and Housing, has introduced a legislative proposal to phase out the mandatory building damage insurance scheme for residential construction. If passed, the scheme would be phased out by January 1, 2027, meaning professional developers would no longer be required to take out this specific insurance to cover serious construction defects.

The Ministry for Children, Seniors, and Housing stated that the current system has not provided the level of protection consumers expect. Data from 2022 to 2025 indicates that the scheme covered only between 0.8% and 4.7% of reported building damages annually, a rate significantly lower than other types of insurance.

In response to concerns from stakeholders, including the consumer organization Forbrugerrådet TÆNK regarding the potential loss of consumer protections, the Minister is also establishing a working group. This group will investigate how to maintain adequate consumer protection for new construction following the removal of the insurance requirement.